COT on forex and commodities

Key arguments

• Dollar longs are crowded and one-sided, raising reversal risk if fundamentals or technicals shift; the late-July unwind is cited as precedent.
• Euro and sterling shorts hit multi-year highs amid European political and fiscal turmoil and softer UK positioning.
• Gold shows divergence: ETF holdings at a four-year high while managed money cut futures longs to a four-month low.
• Grain long liquidation extended a fourth week, led by corn after the bearish WASDE triggered the biggest one-day slump since 2023.

Corresponding source evidence

1. • Forex: Speculators lifted their gross dollar long by 27% to an 11-week high of USD 44.6 billion, a USD 37 billion increase in just four weeks, raising the risk of a crowded trade reversal.
2. • Metals: Managed money reduced exposure across all metals, led by gold, as dollar strength and elevated US real yields continued to weigh on sentiment ahead of Wednesday's inflation print.
3. Dollar strength was particularly pronounced against the euro, amid ongoing political and fiscal turmoil in Europe, and the Mexican peso, which fell to its lowest level of the year after minutes from the latest central bank meeting suggested policymakers were increasingly open to rate cuts, undermining the currency’s carry appeal.